AA Reit says CWT is not in rental arrears

AIMS Apac Reit (AA Reit) on Tuesday said that one of its top 10 tenants, CWT Pte Ltd, has not defaulted on its rental payments under the lease agreements in relation to 20 Gul Way and 30 Tuas West Road.

Manager of the Reit, Aims Apac Reit Management, in a regulatory filing, pointed out that the wholly-owned subsidiary of CWT International is among its top 10 tenants and the gross rental income received from CWT's leases represented 8.4 per cent of the Reit's gross rental income for the third quarter of financial year 2019.

Furthermore, it said that there has not been default by CWT on rental payments nor are there arrears due from the tenant as at Apr 16.

The statement said: "AA Reit presently holds security deposits ranging from three to six months of rental in the form of bank guarantees amounting to approximately S$4.5 million, and AA Reit's exposure to CWT's leases will be further reduced due to the expiry of the lease agreements, with the final lease expiring in July 2021. Based on AA Reit's Q3FY9 gross rental income, approximately 5.1 per cent of AA Reit's gross rental income from CWT will progressively expire in the current financial year ending Mar 31, 2020."

On Apr 16, CWT International failed to pay accrued interests and certain fees in the total amount of approximately HK$63 million (S$10.93 million) to the lenders which have become due and payable under its facility agreement entered into by CWT International for the advancement of a loan in the principal amount of HK$1.4 billion.

As a default has occurred under the facility agreement, the lenders have declared that all amounts accrued or outstanding under the facility agreement be immediately due and payable, and that the security relating to the facility agreement has become enforceable. The security includes 100 per cent shareholding of CWT International in the respective holding companies of CWT Pte Ltd.